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September 1, 2010

The federal spending effect on Md.

Why is Maryland's jobs picture better than most other states? A certain city to the south of us is a big part of the reason.

A new Census Bureau report offers a reminder of just how key federal spending is here. Federal funds earmarked for contracting work in Maryland last fiscal year topped $34 billion -- a 35 percent increase from a year earlier.

If we're a company town at all, that company is Uncle Sam Inc.

Jobs are a variable in the housing-market equation, so it makes sense to pay attention to the federal effect if you're trying to figure out what will happen to home sales.

On the one hand, there's BRAC -- the base realignment and closure effort -- bringing jobs to the area. And not just the jobs relocating from out of state. "Four military bases in Maryland are all getting hundreds of millions of dollars in construction spending," said Richard P. Clinch, director of economic research at the University of Baltimore's Jacob France Institute.

On the other hand, there's the sky-high budget deficit putting a cap on future growth. The Department of Defense, a major source of contracting dollars in Maryland, is promising to tighten its belt.

Clinch has long warned that the federal government can't continue spending at the pace it has, and that Maryland will feel the effects when that change comes. We might be getting to that point.

Do you think BRAC will outweigh any slowdowns or cuts to federal spending in Maryland?

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (7)
Categories: The economy
        

Comments

Even though the federal contracting dollars help the area, the amount of federal workers in general also help stablize the economy in the Baltimore Washington corridor.

CH, absolutely. Total federal spending of all sorts, from contracts to salaries to Social Security payments, totaled $92 billion in Maryland last fiscal year.

The question we should ask: is this good? Or more precisely, acknowledging that it is good for MD, are we good enough to acknowledge that it comes at the expense of the rest of the country?

The answer to these questions dictates whether or not we want to return 2 pork champions who sit on appropriations: Dutch "Hungry Hungry Hippos" Ruppersberger, and Barbara Mikulski. Is the job of your congressman or senator to go to Washington and out elbow the other pigs and the federal trough? Or is it to draft and support policy that creates jobs and growth for the entire economy?

Federal earmarks are modern day tragedy of the commons game theory 101.

wow, thats lot of spending. Why dont they use some extra money to help out people stuck in foreclosure issues.

foreclosureexpert4u,
So you want to have the money being used for Social Security payments and federal salaries to pay for mortgages for people in foreclosure? Except, I guess, you still want the federal employees who would work on transferring the money to help out people stuck in foreclosure issues?

Josh Dowlut for Congress!!!!! You have my vote. Jamie should try to hook up you up with an interview so you can unseat Ruppersberger. Come on Jamie. Hook him up. I am sure you can get him on the front page for some publicity?

Anoynymous, I'm happy to have nothing to do with political coverage. That's a thankless job. Give me housing stories any day.

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
Baltimore Sun articles by Jamie
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